Parsing low banking penetration

Just this month the World Bank released the 2014 edition of its Global Financial Inclusion (Findex) database. Findex provides useful indicators on savings, borrowings, and payments made by people across the world. The data indicate that the global, adult, banked population stood at 62 percent as of 2014 end, but that still leaves a whopping 2 billion folks that still remain un-banked.
Going through the latest report, one comes across two interesting bits of data on Pakistan. But first note that Pakistan's banking density pales in comparison to the region. Findex shows that just about 13 percent of Pakistan's adult population (age 15 and above) had a bank account as of 2014. Compared to this, 83 percent of adults in Sri Lankan, 79 percent in China, 53 percent in India, and 31 percent in Bangladesh had a bank account.
Now there could be a host of social or economic reasons for such sharp regional disparity for Pakistan. But two major reason seem to have been well-captured by Findex.
In Pakistan, the data show, only about 5 percent of women hold a bank account. This is extremely low compared to 83 percent of women who have a bank account in Sri Lanka, 76 percent in China, 43 percent in India, 37 percent in South Asia (average) and 26 percent in Bangladesh. About half of Pakistan's population is estimated to be female; therefore the impact of an abysmal ratio of female bank accounts is one that weighs down the countrys overall index.
The other, rather intuitive insight is that only 11 percent of adults in the poorest 40 percent of households of Pakistan have bank accounts. Of course, the banking penetration would be this low among the poor, youd say: the poor don't have money, often lack paperwork, normally don't find bank branches nearby; or simply don't trust or understand banking system.
Fair enough - but what explains the fact that a higher, 80 percent of poor adults (belonging to poorest 40 percent of the households) have bank accounts in Sri Lanka, 72 percent in China, 44 percent in India, 38 percent in South Asia (average), and 23 percent in Bangladesh? Surely the poor in these countries cannot be more bank-savvy than their Pakistani counterparts are.
A bank account is not the be-all and end-all of financial inclusion - its a start. Penetration of microfinance sector and mobile financial services both has been increasing in the country lately, which may help in financial mainstreaming across the country. Going forward, it is imperative that financial inclusion strategies put a premium on reaching out to marginalized population groups such as women and the poor.